This week has seen the Vista ad with Jerry Sienfeld and Bill Gates hit the airwaves.

There’s been a bit of debate about how Microsoft got the confirmed Mac extremist Sienfeld to appear ($10 million probably helps) but AdViking thinks that The Silicon Apartment is probably closest to the mark.

The ad follows the Mojave Experiment where people thought they were testing the next OS from Microsoft where in fact it was just Vista.

These campaigns are the first coming out of Crispin Porter + Bogusky, the agency that was hired to make Microsoft hip. Again, you can find plenty of negative coverage of the ads and AdViking isn’t quite sure what to make of it all, is it really suble and CP+B are geniuses or is all just really really bad advertiing. Current thinking is:

Forget really if they are good or not, the reality is that people are talking about Microsoft ads, so that’s got to be good…especially if you think the typcial chats are going:

Are we there again? If the press is to be believed (OK, OK, bear with me!) then we’re already there. Officially we entered a ‘bear market’ in the UK earlier this month (i.e. 20% lower FTSE than the peak, which was last June). No-one wants to lend money to anyone who actually needs it.

The one mild positive for AdViking is that digital spend continue to grow, albeit modestly.

So is it real or are we talking ourselves into it? Confidence is such a fragile thing – and confidence determines likelihood of purchase across the board, be it FMCG or big ticket items.

<aside> There’s a potentially interesting study from Datamonitor about retail trends that raises that old chestnut the ‘sacrifical consumer’… but at a little short of £3000 you’ll have to make a lot of brand trade-downs to afford this particular treat. The Sacrificial Consumer is the shopper who will, for example, buy own brand cornflakes and toilet paper so that (s)he can afford a nice bottle of win. </aside>

Digital marketing is still growing because it is quick, measurable, adaptable, effective and relatively transparent. But the smart money is going to go on engagement marketing (digital can be really good at this).

This means doing everything you can to get customers you’ve found to make that first purchase and then keen coming back for more… better still, having them tell their friends and families about it while they’re at it.

In other words, conversion, cross-sell, upsell, retention.

So that’s back to marketing as a conversation, not a one-way shouting match.

That means using established tools like email marketing. (Not that horrible spam stuff, but messages your customers actually want to read – and buy from).

The AdViking scouts are hearing from unofficial but reliable sources in the field of battle that both Miva and Vibrant Media have made staff layoffs in Europe during Q2 2008. This is regrettable for the employees who are getting their pink slips (or P45s) and we hope that all good people find rewarding and fulfilling employment quickly. Alas, AdViking is not hiring for our latest adventure. At least it is summer and a good time for a bar-b-q and some strong ales.

We do want to note that we believe these layoffs are a sign of the general slow down due to the economy and perhaps the natural advertising cycle. However, we do not believe that the online ad spend is going down overall, only that the spend pattern will migrate to the bigger and better quality sites (like portals) or ad networks and rich media channels (ie, video) – all while we watch online advertising out pace TV advertising in the UK. And is predicted in general to grow around 20% or a bit less depending on what report you read. Those players further down the food chain and/or offering poor products (and traffic) will suffer. We fear that many established players as well as start-ups in the ad space or with ad funded models will be forced to trim back and some will perish. This is a time when it is going to be safer at the head of the long tail of advertising.

On a related note we were reading the UK NMA this week which is touting a story titled “Portals drop ad rates to fill space” (note: paid content, best save your money) and we don’t buy it yet – the idea that spend is shifting away from portals or that their is price pressure. The article goes on to imply that display (banners, brand advertising – which matters!) are being impacted first and that as spend tightens it is shifting to ROI or direct response products. AdViking thinks this is a poor strategy by media buyers as it will only drive up the cost of media or clicks on the likes of AdWords and that then pushes ROI down. Down a rat hole of DR chasing Google’s tail… All media buyers please re-think this strategy, try to get that right mix of spend and help prove the NMA story wrong. Anyway, digital is the king of advertising now. Long live The King!

I was at AdMonsters in Berlin this week. This was a very well run and enjoyable event. Thankfully they “firewall” the sponsors (vendors) at this event from the members (publishers) and I think this helps keep the conversations focused and at times very open. BTW – I was there as a sponsor (as part of Microsoft Advertising), they made me work for it as I had to run 2 workshops. Thanks to the publishers the workshops were very good and generated some valuable insights especially around the challenges of inventory management for display… I digress. The point of this short post was to outline an old but still well worth remembering reason why brand advertising is very important to content owners. I will now try to explain.

If you have a site with great content (think the Guardian or NY Times) you want your users to stay on the site and you do not want them to click away. However, you need to support your business with ads (ie, ad funded) and thus you need those brand advertisers to buy ad slots on your site (usually in the form of CPMs). It will always be a balance between how many ads and how they are displayed vs. content and editorial best practice. The higher the production value of display ads (more rich media and video please!) the better. Users get the impact, advertisers get value, the publishers get paid and we get to read great content. What we at AdViking call a virtuous cycle. I wonder if the folks over at Google AdWords ever think about this virtuous cycle? Or the smart folks who came up with the 2nd search box?

This got the AdViking crew thinking a bit more about the old “above the line” (branding) vs. “below the line” (direct reponse or DR) split or paradigm. After a few too many fine German pilsners we found ourselves asking why is everyone trying to battle Google in the DR space? Or as John Battelle says (thanks JB for keeping it real; btw – AdViking loves your blog):

Straight down a rat hole. (A direct response rathole, I might add – the majority of dollars on the web are still in DR).

We agree this could be a really bad hole to fall into. Sure DR works but the whole point is it takes traffic away from your content! Simple idea that is easily forgotten while chasing all those ad dollar$ like some sort of crazed publsihing pimps (or do I mean whores?). Maybe DR is a whore and branding is the pimp? As we board our viking ship for battle we say “long live brand advertising online!”

Need to digest these over a long holiday weekend… Lots to think about and I have say this should prove a great spark for a wider discussion on ad networks, branding and the next phase of online advertising and publishing.